UnionBank buys P237 million Series C bonds

MANILA, Philippines — Union Bank of the Philippines has successfully completed its dual-tranche bond offering with a bond exchange option, having purchased more than P200 million worth of bonds issued three years ago.

The Aboitiz-led bank has purchased P236.7 million worth of its Series C bonds as part of its bond exchange program for its new dual-tranche issuance of series F and series G bonds.

Once settled on Dec. 4, the total outstanding amount of Series C bonds due Dec. 9, 2023 would be P7.878 billion.

In December 2020, UnionBank raised P8.115 billion via the issuance of the three-year bonds with a coupon of 2.75 percent.

Under the program, UnionBank has extended to the holders of the fixed rate Series C bonds the option to sell the exchangeable bonds to the bank in exchange for subscription to any of the 1.5 or three-year bonds.

UnionBank is looking at raising at least P2 billion after returning to the domestic bond market via the issuance of 1.5- or three-year fixed-rate bonds due 2025 and 2026, respectively.

The fund raising activity is part of UnionBank’s P50 billion bond program. Each tranche will be offered with a minimum aggregate principal amount of P1 billion, with an oversubscription option.

The public offering of the 1.5- and three-year bonds carrying interest rates of 6.5625 percent and 6.68 percent per annum, respectively, is set to end on Nov. 29 and the listing on the Philippine Dealing and Exchange Corp. (PDEx) on Dec. 5.

UnionBank earlier raised its bond program by 28 percent to P50 billion from P39 billion.

Proceeds of the bond program will be used to finance the migration of the acquired Citi consumer banking business, as well as continued enhancements of its digital channels and feature builds to accelerate its aspiration of becoming a leading consumer bank.

Earnings of UnionBank fell by 20 percent from January to September after taking a P3.6 billion hit from the integration of the consumer business of global banking giant Citi.

Based on its latest financial statement, the bank booked a net income of P8.1 billion during the nine-month period, P2.02 billion lower than the P10.12 billion recorded in the same period the previous year.

Last year, UnionBank focused on the seamless integration of the acquired Citi consumer business and the commercial launch of UnionDigital as one of the six digital banks licensed by the Bangko Sentral ng Pilipinas.